Greenland Group set to Build London’s Tallest Tower

(qlmbusinessnews.com via bloomberg.com – – Sun, 6 Nov, 2016) London, Uk – –

In 2013, the architecture firm HOK was approached by a representative of the Greenland Group, China’s third-largest developer. “They said they were investing in London and that they’d made an offer on a parcel,” said HOK Senior Vice President Larry Malcic, who sat, on a recent afternoon, holding a cup of tea in his firm’s London office. “They’d done their homework.”

The land in question was a run-down warehouse adjacent to Canary Wharf, an area in the far eastern end of the city that grew popular in recent decades for its proximity to London’s financial center. Nothing in the area, however, would match what the Greenland Group hoped to build: an £800 million ($996.9 million), 67-story tower, which, when completed, would be the tallest residential tower in Western Europe. “From the beginning, they saw it as a fundamentally residential tower,” Malcic said. “And they wanted to get value out of the site, so we’ve gone as tall as you can go.” (That’s a literal statement: Any higher and the tower would violate London City Airport’s flight path.)

The building, which is named the Spire, is designed as a three-petal, undulating tower. Its position on a bend of the Thames provides unparalleled views of London in all directions, and its amenities, including a 35th-story lounge with an infinity pool, an entire floor devoted to recreation rooms, and even an outdoor covered track, would place it at the (literal) top of London’s booming luxury real estate.

And then, just as the building broke ground, the U.K. voted to leave the European Union and London’s real estate market, which had already been showing signs of weakness, began to crumble.

The Greenland Group vowed to forge ahead with the building. “The UK’s vote to exit the European Union (“Brexit”) cannot be said to have had no effect on the property market in London, and we are aware that there could be some turbulence in the future,” wrote Wenhao Qian, managing director of Greenland Investment Ltd., in an e-mail. “Developments of note, as well as iconic buildings, are continuing to do well. We feel that the advantages of London—its global cachet, cosmopolitanism and being a centre of world trade—bode well for a positive future for both the property market and the wider economy.”

The question, in turn, is whether Greenland's commitment represents canny long-term planning or something closer to stoicism in the face of adversity.

Hurdles and Payoffs

First, said Faisal Durrani, head of research at the broker, Cluttons, it’s important to consider the overall London housing market, Brexit or no: “We’re probably building less than half the supply of housing that the city needs on an annual basis,” he said. “We’re constructing about 40,000 to 50,000 new units a year, when we really need about 120,000.” In a vacuum, then, the Spire is adding a much needed supply of apartments (861 in total) in the face of cacophonous demand.

But that demand comes with a caveat. “Most domestic [U.K.] demand tends to seek out what we call ‘period property,’ or anything that isn’t new construction,” Durrani said. “So despite a building being brand-new and modern and packed with all sorts of amenities, it’s not a kind of place domestic buyers will aspire to live in.”

Happily for Greenland though, roughly half of all central London buyers are currently international, and many of those buyers “are coming from new-build cities,” Durrani said. “So new buildings appeal to them— they’re used to it.” More good news for the Greenland Group: A recent Cluttons survey of 127 UAE-based high-net-worth individuals listed Canary Wharf as the top neighborhood for residential investment, which Durrani said could be the result of a massive influx of investment into the neighborhood from sovereign wealth funds. Investors “have seen their government has identified a safe space, and they’re going along with it,” he explained.

Still, the recent volatility in the U.K. housing market has caused some international investors to sell (at least, attempt to sell) their London properties. “What's happened, with values softening over most of the city, is that we've seen some international buyers trying to offload their stock,” Durrani said. “There's very little domestic interest in purchasing it because it's perceived to be overpriced.” And, Durrani added, “it often is overpriced.” If economic volatility—not to mention Britain's exit from the E.U.—continues, that could eventually further dampen international interest.

The final factor that could affect the Spire's success? Time. As the U.K.’s domestic buying base grows (and ages), there’s a good chance that they’ll come around to this new, glassy construction. “The cookie-cutter mentality hasn’t arrived yet for domestic buyers, but over time I think that’s likely to change,” Durrani said. “Purely because there aren’t enough homes to go around. It’s as simple as that.”

Planning For the Future

In the short term, the Spire can hope to attract international buyers confident in London's future as a financial center, or at least in its position as a city more stable than those in their home country. In a mid- to long-range outlook, demographic indicators imply that its buyers could come from within the U.K.

Malcic, the architect at HOK, said the building was designed with just this sort of change in mind. “We’re looking to appeal to a whole range of people,” he said. “I think it will be equally appealing to people in the home counties whose children have grown up, who don’t want to spend time cutting the grass anymore.”

Malcic said that HOK accounted for this uncertain future with malleable tech configurations (“What people need is not built-in tech anymore,” he said, “what they need is the flexibility to put in whatever technology is coming”), extra-high ceilings (“which gives a graciousness, but also a degree of flexibility,”) and such amenities as refrigerated storage lockers to stash grocery deliveries. “In the old days, you measured success by how much square feet you had,” he said. “Now it’s how much convenience you have.”

Construction is set to begin in early 2017, with a completion date of 2020. And while the Brexit uncertainty and U.S. elections roiling world markets make it impossible to make even a reasonably cautious prediction about the future, Durrani, the analyst, said that smart investors shouldn't try. “It’s harder than ever to time a building launch with property market cycles,” he said. “Most investors in this market are in it for the long term, and the long-term picture is a lot rosier than the next three to six months.”

By James Tarmy

Marks & Spencer to announce plans to shut some stores at home and abroad

(qlmbusinessnews.com via uk.reuters.com – – Fri, 4 Nov, 2016) London, UK – –

Retail
Simon D/flickr.com

Struggling British retailer Marks & Spencer is expected to announce plans next week to shut some stores at home and abroad, with analysts forecasting a slump in first-half profit and another fall in clothing sales.

Steve Rowe, a 26-year company veteran, took over as chief executive in April and has the tough task of reviving the 132-year-old British institution that has fallen out of fashion over the last decade.

So far, his priority has been trying to turn around Marks & Spencer's (M&S) underperforming clothing and homewares business.

But on Tuesday he is expected to outline a rationalisation of its international operations and say how the company will make better use of its UK estate of more than 900 stores.

Profit at M&S's overseas business, which contributes about 7 percent to the group total, slumped 40 percent in the 2015-16 fiscal year, mainly due to losses at its own – rather than franchised – stores.

The division comprises 468 stores across 58 international markets, including 194 owned by M&S.

Seeking to cut costs, some of these stores in Western European markets, including France, as well as in China are expected to be ditched by Rowe, according to analysts, as he seeks to return the division to profitable growth by reversing the expansion of his predecessor.

Most don't anticipate radical changes to M&S's UK stores as currently all of them still make some profit. But given the growth of e-commerce, they do expect Rowe to signal a small number of store closures and a desire for a smaller estate over time, as well as plans to correct some badly performing shops through re-locations and new layouts.

LOWERING PRICES

Rowe has pledged to revive M&S's clothing by improving ranges and availability, cutting prices and reducing promotions.

However his plan, outlined in May, came with a warning of a short-term dent to sales and profit, and in July the group reported its worst quarterly clothing sales for a decade.

Shares in M&S have fallen 23 percent this year, hammered by the May profit warning and fears a drop in sterling after Britain's vote to leave the European Union will increase sourcing costs.

For the second quarter to Oct. 1, M&S is expected to report a 3.9 percent fall in sales of clothing and homeware at shops open over a year, according to a company compiled consensus of eight analysts' forecasts. That would be an improvement on the first quarter slump of 8.9 percent.

The food business, which contributes over half of group revenue and about a third of profit, is performing better than clothing and outperforming the wider food market. Analysts are on average forecasting flat second-quarter like-for-like sales. They fell 0.9 percent in the previous quarter.

Analysts on average expect a first-half underlying pretax profit of 216 million pounds, down from 284 million pounds a year earlier.

By James Davey | LONDON (Editing by Mark Potter)

British insurer Admiral abandon plans to use data taken from Facebook

(qlmbusinessnews.com via uk.reuters.com – – Thur, 3 Nov, 2016) London, UK – –

British motor insurer Admiral has had to abandon plans to use data taken from Facebook (FB.O) to price insurance premiums for first-time drivers following discussions with the social media firm, an Admiral spokeswoman said on Wednesday.

British newspapers said earlier on Wednesday the insurer would analyze Facebook accounts of new drivers for personality traits which show a cautious nature, such as writing lists and arranging a set time and place to meet friends.

Insurers say examining social media could improve the pricing of policies, but critics say this could erode customers' privacy.

Admiral's firstcarquote app was designed to allow new drivers to share social media data in order to get a discounted quote.

“Following discussions with Facebook, the product is launching with reduced functionality, allowing first time drivers to log-in using Facebook and share some information to secure a faster, simpler and discounted quote,” the spokeswoman said by email.

“Admiral does not have access to customers’ Facebook data and does not hold social media data to set prices for its customers.”

Facebook bans the use of its data on apps to make decisions about “eligibility”, such as how much interest to charge on a loan.

“Protecting the privacy of the people on Facebook is of utmost importance to us,” a Facebook spokesman said by email.

“We have made sure anyone using this app is protected by our guidelines and that no Facebook user data is used to assess their eligibility. Facebook accounts will only be used for log-in and verification purposes.”

Steep insurance premiums for young drivers in the UK have encouraged the use of technology to cut prices, such as telematics – black boxes installed in cars to monitor safe driving.

Some UK insurers also monitor public social media data to help them identify fraudulent claims, industry sources say.

(Reporting by Carolyn Cohn; Editing by Elaine Hardcastle)

Theresa May warned by Irish counterpart Brexit talks may prove Vicious

(qlmbusinessnews.com via bloomberg.com – – Tue, 02 Nov, 2016) London, Uk – –

Brexit talks
Number 10/flickr.com

U.K. Prime Minister Theresa May was warned by her Irish counterpart that the upcoming Brexit talks may prove “quite vicious” as a panel of judges prepared to rule on whether she alone can begin those negotiations.

“There are those around the European table who take a very poor view” of the fact that the U.K. decided to leave, Irish Prime Minister Enda Kenny told a forum in Dublin on Wednesday. The argument will be fought “very toughly,” he said, adding that May could start the process earlier than the end of March.

May reiterated in Parliament in London on Wednesday that she’s seeking the best possible deal for the British economy when it splits with the European Union as she prepares to start the two-year withdrawal process early in 2017.

Whether she can trigger the talks unilaterally without the backing of Parliament is the subject of a legal challenge, which three London judges said they will rule on at 10 a.m. on Thursday. The losing side is likely to begin an appeal to be heard at the Supreme Court in December.
Investors have looked to the lawsuit to delay the process of leaving amid concerns that, by prioritizing immigration controls over safeguards for trade and banking, May favors a “hard Brexit” that will cost her country membership of the tariff-free EU single market.

No ‘Cherry-Picking’
European governments have united in saying the U.K. can’t stay in the market and crack down on immigration. German Chancellor Angela Merkel said again Wednesday that the negotiations must respect the EU’s values, such as free movement of labor.

“Our relations to the U.K. must remain positive and friendly and frictional losses for the economy must be minimized,” Merkel said. “But on the other hand, the 27 member states must stand together and not set standards that would lead to cherry-picking according to whatever they need.”

Her government’s council of economic advisers called Wednesday for “constructive negotiations” to keep Britain in the EU.

“There is still a chance to prevent an exit through constructive negotiations or at least to negotiate a succession agreement which minimizes the damage for both sides,” the council said.
Cypriot Finance Minister Harris Georgiades said in an interview that his country also wants to keep ties between the EU and Britain as close as possible.

Cyprus, a former British colony, “is keen to participate in the negotiating process to ensure that the relationship between the EU and the U.K. is as strong as possible after Brexit,” Georgiades said in Nicosia.
‘Benefit Electorally’

May could be angling for a rupture with the EU for domestic electoral purposes, academics including Anand Menon, professor of European politics at King’s College London, wrote in a report published Wednesday.

“Theresa May and her political strategists have made a calculation that they can benefit electorally from a hard Brexit,” said Menon. “The government is formulating a combination of seemingly left-wing economic policies — industrial strategy, interventionism and investment — with a right-wing approach to things like migration and social affairs.”
Moody’s Investors Service said it would cut the U.K.’s credit rating if the government failed to secure continued access to the core of the single market.

Pub Threat
JD Wetherspoon Plc Chairman Tim Martin, one of Britain’s few pro-Brexit executives, said EU politicians should nevertheless be wary of “bullying” Britain, arguing that could mean his pubs end up selling less French champagne, German beer and other drinks from European producers.

“The ultimate sanction will be in the hands of U.K. consumers, should they take offense at the hectoring and bullying approach,” Martin said.
By contrast, London Stock Exchange Group Plc Chief Executive Officer Xavier Rolet said finance executives are not being alarmist when they threaten to move jobs and operations elsewhere in Europe. He stood by an estimate that Brexit could cost 100,000 jobs in London’s derivatives business.

“That whole engine is at risk,” Rolet said. “These are real numbers, they are not calibrated to create either a conservative approach or an alarmist approach.”

Former Chancellor of Exchequer Alistair Darling also advised May not to favor different industries in the divorce, almost a week after she secured continued investment in the U.K. from Nissan Motor Co.

“You can’t possibly segregate bits of the British economy and say that one matters today, that one can wait for a couple of years” Darling said in a Bloomberg Television interview with Tom Keene.

By Dara Doyle and Patrick Gower

Growth in Britain’s construction industry hit a seven-month high in October – PMI

(qlmbusinessnews.com via uk.reuters.com – – Tue, 02 Nov, 2016) London, UK – –

Construction
Omar Bárcena/flickr.com

Growth in Britain's construction industry hit a seven-month high in October as housebuilding rose, but slowing order books and soaring prices for building materials darkened the outlook, a survey showed on Wednesday.

The Markit/CIPS UK Construction Purchasing Managers' Index(PMI) rose unexpectedly to 52.6 from 52.3, confounding a Reuters poll forecast for a drop to 51.8. Sterling and government bonds showed little reaction to the figures.

While the survey chimed with signs the economy has maintained momentum since June's Brexit vote, weakening growth in new orders and rocketing costs suggested next year will prove more difficult.

“The downturn in the construction sector continued to ease in October, but it would be premature to conclude that the sector is back on a recovery path,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

Survey compiler IHS Markit said respondents held back investment spending because of uncertainty surrounding Britain's exit from the European Union.

Britain's second-biggest housebuilder Persimmon cited this uncertainty on Wednesday as it said it would slow the pace of new land purchases, despite sales rising almost a fifth since the Brexit vote.

The PMI showed business expectations for the year ahead cooled markedly, while prices paid by construction firms for raw materials and goods rose at the second-fastest pace since 2011.

“We expect input prices to rise significantly in 2017 which will put financial pressure on an industry just about managing on squeezed margins and fixed-price contracts,” said Paul Trigg, construction specialist at trade credit provider Euler Hermes.

A Markit/CIPS survey of manufacturers on Monday also showed rocketing input prices, describing the inflationary impact of weaker sterling as increasingly evident.

The fall in sterling is expected to push the Bank of England to raise its inflation forecasts on Thursday to show a bigger overshoot of its price target than at any time since it gained independence in 1997.

The BoE is widely expected to hold off from a fresh interest rate cut on Thursday.

Housebuilding drove the bulk of construction activity, with the commercial and civil engineering sectors broadly stagnant, the PMI showed.

Mortgage lender Nationwide reported unchanged house prices in October after rising in monthly terms in each of the previous 15 months, a new sign of the market cooling after the Brexit vote.

Preliminary official data for the third quarter suggested construction output contracted 1.4 percent, despite stronger-than-expected economic growth of 0.5 percent for the period.

(Reporting by Andy Bruce, editing by Catherine Evans and Richard Balmforth)

British housebuilder Cala in talks with China’s Evergrande property developer – source

(qlmbusinessnews.com via uk.reuters.com – – Tue, 1 Nov, 2016) London, UK – –

Chinese Developers
Gareth Williams/www.flickr.com

China Evergrande Group (3333.HK), China's second-largest property developer, is in “early stage” talks to buy Cala Homes, a person familiar with the upmarket British housebuilder told Reuters.

Edinburgh, Scotland-based Cala Homes, which is owned by insurer Legal & General (LGEN.L) and real estate managers Patron Capital, was being advised on the offer by investment bank Lazard, its long-term advisor, the person said.

Sky News, which first reported on the approach, said Evergrande's offer could be worth close to 700 million pounds. (bit.ly/2f8dzLh)

Cala, which builds large, high-end homes across affluent areas of Britain such as around the M25 motorway which circles London, in the Midlands and Scotland, reported revenue of 587.1 million pounds for the year ended June 30, 15 percent higher than a year earlier. Net bank debt stood at 123.9 million pounds at end-June.

In its results statement in October, Cala said it had a contracted land bank with gross development value of 4.7 billion pounds as of end-June and that enquiry levels and reservation rates had risen in the 13 weeks after the EU vote on June 23.

“From time to time we may find ourselves the subject of speculation but from our perspective it is very much business as usual,” a Cala spokesperson said in an emailed statement.

Legal & General, Patron Capital and Evergrande declined to comment.

The approach comes as recent mortgage data and statements from housebuilders have indicated that the UK housing market is recovering somewhat from a sharp downturn in activity that followed Britain's vote to leave the European Union.

The Brexit-induced pound slide GBP= has fuelled foreign demand to invest in the sector, especially from Chinese buyers keen to diversify away from a slowing home market.

China Vanke (2202.HK)(000002.SZ) confirmed in September that it had bought a London office property.

For Guangzhou-based Evergrande, one of the most indebted companies in the industry, the purchase of Cala would mean access to the UK housing market as developers benefit from a chronic supply shortage. Britain launched a 5 billion-pound homebuilding stimulus package last month.

Evergrande has been aggressively investing in other companies as it looks to lift some of the pressure of having amassed some $57 billion in debt, almost six times its market value, on land acquisitions and corporate mergers.

(Reporting by Esha Vaish in Bengaluru, additional reporting by Clare Jim in Hong Kong; Editing by Alexandra Hudson)

 

 

National Audit Office Say Britain Must Identify Best Ways of Taxing The Wealthiest

(qlmbusinessnews.com via bloomberg.com – – Tue, 1 Nov, 2016) London, Uk – –

Wealthy homes
jan buchholtz/flickr.com

A unit set up to claim unpaid tax from the richest people in Britain raised 416 million pounds ($510 million) in the past financial year but must do more to improve its enforcement activities, the National Audit Office said.

By concentrating on the 6,500 taxpayers with assets of more than 20 million pounds, Her Majesty’s Revenue and Customs High Net Worth Unit exceeded its 2015-16 target of 250 million pounds, the NAO said in a report published in London on Tuesday. To raise more revenue, it must identify what techniques have worked best since it was set up in 2009, the spending watchdog said.

“The tax affairs of the wealthiest in society are complex, making it harder for HMRC to ensure that they are paying the right amount of tax,” NAO head Amyas Morse said in an e-mailed statement. “While the yields from HMRC’s work in this area have increased, it needs to evaluate what approaches are the most effective.”

Individuals with wealth of more than 20 million pounds contributed 4.3 billion pounds in tax in 2014-15 and formal investigations are being carried out into the liabilities of more than 2,000 of them, the NAO said. An initial estimate suggests 1.9 billion pounds in unpaid tax over a number of years may be due as a result of the probes, of which avoidance schemes account for 1.1 billion pounds.
The definition of “high net worth” has been extended to include people with assets of more than 10 million pounds for the financial year that started in April, extending the reach of the unit, which has a staff of 380, to include a further 1,000 taxpayers, the NAO said.

In a move uncommon elsewhere in the world, the U.K. assigns one of 40 “customer relationship managers” to each wealthy individual and they “are responsible for understanding the risks and behaviors of the people assigned to them,” usually through working with their representatives, the audit office said.

By Thomas Penny

Pound is the world’s worst-performing currency for this October 2016

 

(qlmbusinessnews.com via bloomberg.com – – Mon, 31 Oct, 2016) London, UK – –

The pound is the world’s worst-performing currency this month, trailing behind about 150 peers, as the first signs of how Brexit will look emerged in October.

 

Pound coins
Images Money/www.flickr.com

Sterling posted its biggest monthly decline versus the dollar since the U.K. voted in June to leave the European Union amid speculation that the government is headed for a so-called hard Brexit, where unfettered access to Europe’s single market is sacrificed for immigration controls. The pound dropped after political headlines and comments from lawmakers and central-bank officials underlined its vulnerability as concern about Britain’s exit from the world’s largest trading bloc intensified.

 

“This month has all been about hard Brexit concerns coming to the forefront,” said Viraj Patel, a foreign-exchange strategist at ING Groep NV in London. “It’s typical for a currency trading under heightened political uncertainty to be vulnerable to new news, either good or bad, and this will be an ongoing factor until we get clarity” over the nation’s future relationship with the EU, he said.

The pound was little changed at $1.2199 as of 4 p.m. London time, leaving its decline this month at 5.9 percent, the most since June, when it plunged 8.1 percent. Sterling has fallen every month since April, cementing its position as the worst-performing major currency this year, having weakened more than 17 percent.

The Bank of England is due to make its interest-rate decision and publish its quarterly inflation report on Thursday amid speculation that Governor Mark Carney may announce a decision on his future at the central bank. Speaking to a House of Lords committee last week, Carney deflected questions on whether he plans to serve a full eight-year term as governor through to 2021, or leave in 2018 as he originally planned.

Swaps signal about a 3 percent probability of a rate cut when the central bank announces its policy decision on Nov. 3. The inflation report follows data last week that showed U.K. growth slowed less in the three months through September than analysts predicted, the first quarterly figures since the June vote to leave the EU.

By Marianna Duarte De Aragao

Hitachi invests millions of dollars in robots meant to help Japan’s aging citizens

 

Bloomberg's Hello World host Ashlee Vance visited Japanese technology giant Hitachi. The tech conglomerate has invested millions of dollars to invent all manner of robots meant to help Japan’s aging citizens in the years ahead.

 

Significant price overhaul of Apple’s new MacBook Pro in the UK post Brexit

(qlmbusinessnews.com via uk.businessinsider.com – – Fri, 28 Oct, 2016) London, UK – –

 

Macbook
Gordon Mei/flickr.com

Apple's new laptops are extremely pretty — but they don't come cheap for Brits.

On Thursday, the Californian technology announced an overhaul of its MacBook Pro line, giving the devices a redesign and adding a touch-sensitive screen that sits above the keyboard.

But it also bumped up the prices for the laptops very significantly in the UK — far more than it did in its home market, the US — in what seems to be a response to the weakness of the pound following the Brexit vote.

Even existing Mac lines — ones that haven't been updated — have had their prices raised in the UK.

Some kind of price increase is often inevitable when doing a big product overhaul. And that's what you see in the States. The cheapest 13-inch MacBook Pro before the upgrade was $1,299; now, it's $1,499.

But in Britain, this price bump is far larger. The cheapest 13-inch MacBook Pro, pre-upgrade? £999. Now? £1,449.

That's an increase of £450 in the UK, compared to $200 in the US. (And remember: The dollar is worth less than the pound!)

This is even more pronounced on the more expensive 15-inch MacBook Pros. The cheapest model, pre-upgrade, was $1,999 in the US and £1,599 in the UK. Post-upgrade, it's $2,399 and £2,349.

That's a price increase of £750 in the UK, compared to an increase of $400 in the US.

An Apple spokesperson provided Business Insider with a boilerplate statement it has used in the past on the subject (emphasis ours):

“Apple suggests product prices internationally on the basis of several factors, including currency exchange rates, local import laws, business practices, taxes, and the cost of doing business. These factors vary from region to region and over time, such that international prices are not always comparable to US suggested retail prices.”

What's changed in Britain this year? Brexit! In June, Britain voted to leave the European Union — shaking markets and causing the pound to lose 18% of its value, dropping to 31-year lows.

Apple isn't trying to fleece British consumers here. As The Guardian's Alex Hern pointed out on Twitter, a “straight USD/GBP exchange, plus 20% for VAT, results in much the same prices.”

It's just that the previous relationship between US and UK prices is no longer applicable due to the falling value of the pound, and so Apple has updated it to correspond with the current USD-GBP exchange rate — protecting its margins, and sending British prices rocketing.

It's also worth noting that the online price listings aren't necessarily direct comparisons, as the US prices don't include sales tax, while the UK ones do include VAT (Value-Added Tax). But sales tax is generally lower than VAT, and in some states like Oregon it's as low as 0%.

We saw something similar happen in September, after the iPhone 7 was announced. Apple took the opportunity to quietly bump up the prices for certain models of iPhone and iPad in the UK — while not changing prices in the US.

And now Apple's doing it again. The MacBook Pro price hike at least comes alongside a redesign — but the company has also raised UK prices on a number of existing products. The 6-core Mac Pro now costs £3,899, £600 more than its previous price of £3,299, while its US price hasn't budged. The Mac Mini and iMac have also had UK price increases.

Rob Price

 

Uber drivers deserve workers’ rights UK tribunal rules

 

(qlmbusinessnews.com via uk.reuters.com – – Fri, 28 Oct, 2016) London, UK – –

 

Taxi Cab
By Ray Wewerka/flickr.com

Taxi app Uber should treat its drivers as employees and pay them the minimum wage and holiday pay, a British tribunal ruled on Friday, in a verdict that could hit thousands of firms and deliver a blow to the ‘gig economy'.

Two drivers brought their case to an employment tribunal in July, saying the rapidly expanding app, which allows users to book and pay for a taxi by smartphone, was acting unlawfully by treating them as self-employed and not providing certain rights.

Uber said it will appeal against what unions described as a “monumental” verdict.

The decision could also affect those who work for firms such as meal delivery services like Deliveroo, in the “gig economy” where individuals work for multiple employers day-to-day without having a fixed contract.

“This is a monumental victory that will have a hugely positive impact on drivers … and for thousands more in other industries where bogus self-employment is rife,” said Maria Ludkin, legal director at the GMB union which brought the case.

Uber is valued at $62.5 billion (48 billion pounds) and its investors include Goldman Sachs and GV, formerly known as Google Ventures.

It has faced protests, bans and legal action around the world including in the United States and much of Europe.

British judges ruled that Uber should pay the drivers the minimum wage, currently 7.20 pounds ($8.80) for over 21-year olds, and that working hours began the moment most drivers logged into the app.

“The Uber driver's working time starts as soon as he is within his territory, has the App switched on and is ready and willing to accept trips and ends as soon as one or more of those conditions ceases to apply,” they said in their verdict.

Lawyers representing the drivers said there will now be a further hearing to calculate the holiday and pay that they should receive and the firm may have to pay pension contributions.

Firms in Britain such as sports retailer Sports Direct have faced a backlash over their use of zero-hour contracts which erode pay and job security.

THREAT TO BUSINESS MODEL

The ruling could have implications for thousands of businesses across Britain and may influence judges in other countries where Uber faces legal battles, according to the head of legal and advisory at Peninsula, which advises companies on employment law.

“Judges in those other countries hearing test cases like this will be mindful of the fact that their colleagues in Britain have thought this and it may influence their decision,” Bertrand Stern-Gillet.

In the United States, Uber faces lawsuits and California state regulators ruled last year that an Uber driver should be treated as an employee rather than a contractor, although that has yet to be extended to all drivers in the state working on the platform.

A French court fined Uber 800,000 euros ($900,000) earlier this year for running an illegal taxi service with non-professional drivers and slapped smaller fines on two of its executives in the first such criminal case in Europe.

In Britain, the San Francisco-based firm had argued that its more than 40,000 drivers enjoy the flexibility of being able to work when they choose and receive on average much more than the minimum wage.

Uber's UK general manager Jo Bertram said it will contest the decision: “While the decision of this preliminary hearing only affects two people, we will be appealing it.”

Most employees in Britain are entitled to the minimum wage but the self-employed do not qualify.

One of the two drivers who brought the case, James Farrar, said that in August 2015 he earned less than the 6.70 pounds ($8.80) an hour for those aged 21 and older which was then the minimum wage at the time.

Uber said he had picked a month in which he had logged onto the app for the longest period of time but had canceled or not accepted the most amount of jobs.

While many welcomed the verdict, some drivers worry that Uber may not win its appeal.

“If the whole model changed, where Uber had to employ drivers and then take the risk on whether there was jobs for them, it wouldn't work and therefore I wouldn't have the flexible lifestyle that I have,” said 66-year-old Steven Rowe who has been with Uber for nearly four years.

“My biggest concern is that they would pull out of the U.K.,” he told Reuters.

By Costas Pitas

(Editing by Stephen Addison/Ruth Pitchford)m

 

Nissan to build more cars in the UK, tempering Brexit fears

(qlmbusinessnews.com via uk.reuters.com – – Thur, 27 Oct, 2016) London, UK – –

Britain's economy slowed only slightly in the three months after the Brexit vote and carmaker Nissan said it would build more cars in the country, tempering fears about the immediate economic impact of the decision to leave the European Union.

The stronger-than-expected growth figures published on Thursday further diminished the likelihood of the Bank of England cutting rates as soon as next week, prompting investors to sell British government bonds.

But finance minister Philip Hammond sounded cautious, saying he still planned to provide support for the economy as Britain launches tough negotiations with the EU next year.

“I think it is right that we still prepare to support the economy during the coming period to make sure that we get through this period of uncertainty,” said Hammond, who is due to announce his first budget plans next month.

Official data showed the economy grew by 0.5 percent between July and September, less rapid than the strong growth of 0.7 percent seen in the second quarter but comfortably above a median forecast of 0.3 percent in a Reuters poll of economists.

Sterling jumped to a one-week high against the U.S. dollar after the data and the yield on 10-year government bonds hit its highest level since the European Union membership referendum.

Marc Ostwald, a strategist at ADM Investor Services, said the GDP data killed the chance of a rate cut on Nov. 3 and could also prompt the Bank's most stimulus-sceptical policymaker Kristin Forbes to call for an end to its bond-buying.

Britain's dominant services industries provided all the growth, helped by a boom in the film and television sector as the latest releases in the Jason Bourne and Star Trek series hit the screens in July along with other blockbusters.

Compared with the third quarter of last year, growth picked up to 2.3 percent, the strongest pace in more than a year, according to the preliminary figures from the ONS.

“COME CLEAN”

Brexit supporters said the figures backed their argument that warnings of a big hit to the economy from a Leave vote were little more than scaremongering.

Economists for Brexit, a group who disagree with the majority view in their profession that leaving the EU is damaging, said Britain's finance ministry “must now come clean” and admit that its long-term forecasting was likely to be wrong, just as its short-term forecasts were.

But many economists are still warning that the real challenge is yet to come.

“The adverse consequences of the Brexit vote will become increasingly clear as inflation shoots up and firms postpone investment over the coming quarters,” said Samuel Tombs of Pantheon Macroeconomics, who correctly predicted the quarterly growth rate in the Reuters poll.

The sharp fall in the value of the pound since June is expected to push inflation to around 3 percent next year. BoE Governor Mark Carney this week noted the “fairly substantial” fall in sterling, in a sign that the Bank was no longer expecting to cut rates on Nov. 3.

Many companies are expected to put investment plans on hold pending the outcome of the two-year process of negotiating Britain's exit from the EU and a possibly longer period for securing the terms of its new relationship with the bloc.

But Japanese carmaker Nissan gave Prime Minister Theresa May a boost by saying it will build its new Qashqai model in Britain. A source said on Thursday the government had offered support to counter any damage from leaving the EU.

The new investment in manufacturing came as the ONS data showed how reliant Britain has become on its services sector, which grew by 0.8 percent from the April-June period.

By contrast, industrial production, including manufacturing, and construction both contracted, down 0.4 percent and 1.4 percent respectively. The fall in construction was the biggest since the third quarter of 2012.

By William Schomberg and Costas Pitas

(Additional reporting by David Milliken and Estelle Shirbon; editing by Andrew Roche)

Unseasonably warm weather boosts British autumn retail sales

(qlmbusinessnews.com via uk.reuters.com – – Thur, 27 Oct, 2016) London, UK – –

Oct 27 British retail sales rebounded in October to grow at their fastest rate in over a year, after an end to unseasonably warm weather boosted demand for autumn clothing, an industry survey showed on Thursday.

The Confederation of British Industry's retail sales balance

surged to +21 from September's reading of -8, far outstripping economists' forecasts of a pick-up to -2.

The expected sales balance for November also rose sharply to +21 from +7, a level last seen in December, and orders placed with suppliers were the strongest since March, though they are expected to dip in November.

September had brought warmer than usual weather, denting demand for new season clothes, but early October saw a return to more normal seasonal trends, the CBI said.

“With our Indian Summer now a distant memory, shoppers have been pounding the high street, with sales of clothing and other retailers outpacing expectations,” CBI chief economist Rain Newton-Smith said.

The figures follow official GDP data earlier on Thursday which showed the economy as a whole grew 0.5 percent in the three months to September, in contrast to forecasts for a steep slowdown after Britain voted to leave the European Union.

But the CBI warned that the slide in the pound since Britain voted to leave the EU was likely to push up prices next year, hurting sales.

“Household spending still has some momentum in the short-term, but we do expect the fall in the value of the pound to push up prices through the course of next year, hitting people's purchasing power,” Newton-Smith said.

ALSO IN BUSINESS NEWS

Official data last week showed British retail sales recorded their strongest quarter of growth since late 2014 in the three months to September, but warm weather and higher prices dented demand for new clothing towards the end of the period.

 By David Milliken

Lloyds set aside a further £1bn to meet compensation claims

(qlmbusinessnews.com via uk.finance.yahoo.com via new.sky.com – – Wed, 26 Oct, 2016) London, UK – –

Lloyds Banking Group has set aside a further £1bn to meet compensation claims for the mis-selling of payment protection insurance (PPI).

The bank, which is 9% owned by the taxpayer, has already been forced to fork out more than £16bn over the issue – by far the biggest share of PPI policies.

Earlier this year, the Financial Conduct Authority (FCA) put a June 2019 deadline on all claims to draw a line under the scandal, which has already cost the banking industry around £30bn.

In its third quarter trading update, the banking group published underlying profit of just under £2bn, which is broadly flat compared to a year ago.

The total income for the quarter was £4.3bn, in line with the same period last year.

The group's statutory profit before tax dropped by 15% in the third quarter to £811m.

Lloyds said that it has accounted for a further provision of £150m to cover other conduct issues, which includes £100m in respect of packaged bank accounts.

“The outlook for the UK economy remains uncertain, however the strength of the recovery in recent years means the UK is well positioned,” the bank said in a statement.

Britain's largest retail bank also reported a £740m deficit in its pension fund, due to company pension schemes being hit by falling bond yields following the Brexit vote.

Over the summer, chief executive Antonio Horta-Osorio announced plans to cut an additional 3,000 jobs across Lloyds and close 200 branches by the end of next year, as part of an efficiency drive to improve dividends and profits against a more testing economic environment.

Shares in Lloyds have fallen by about a quarter since June's referendum and were down to 53.5p in early morning trading.

UK technology start-up Improbable seeks backing from both sides of the Atlantic

(qlmbusinessnews.com via uk.finance.yahoo.com via new.sky.com – – Wed, 26 Oct, 2016) London, UK – –

A British technology company which last year attracted money from one of the hottest investors in Silicon Valley is in talks with prospective backers about a new funding round that could value it at more than £400m.

Sky News has learnt that Improbable, which creates virtual worlds used in complex computer games, has approached investors on both sides of the Atlantic (Shanghai: 600558.SS – news) about putting fresh money into the business.

The talks, which have yet to be concluded, come 18 months after Improbable took $20m from Andreessen Horowitz, the California-based tech investor which was an early backer of Facebook (NasdaqGS: FB – news) .

Improbable is widely regarded as one of the most exciting companies to be based in Tech City, the district of London which acts as a hub for digital start-ups.

The company, which says its software has a wide variety of potential applications, such as modelling how a virus might spread through a major city, was founded little more than three years ago by Herman Narula, a Cambridge computer science graduate.

Improbable has also described its Spatial operating system as being applicable in areas such as economics, finance, town planning, transport and military training.

Last year's fundraising was reported to have valued Improbable at $100m, with talks about a new round raised at five times that valuation raising eyebrows among some technology investors.

“It's a fantastic idea, but the revenue model isn't really proven yet,” said one serial backer of London start-ups.

Improbable is understood to have presented at a conference hosted by Allen & Co, the investment bank which focuses on technology and media deals, earlier this year.

Augmented and virtual reality companies are attracting significant investment from global technology investors, further inflating many of their valuations.

Allen & Co is now said to be assisting Improbable with its fundraising discussions. Improbable declined to comment.

Government gives greenlight to third runway at Heathrow

(qlmbusinessnews.com via new.sky.com – – Tue, 25 Oct, 2016) London, UK – –

Virgin's founder is among business leaders wanting ‘shovels in the ground' as Heathrow nears full clearance for a third runway.

Sir Richard Branson has been among business leaders giving a warm welcome to the Government's support for a third runway at Heathrow.

The Virgin Group's founder told Sky News he wanted to congratulate the Government for taking the “tough” decision – arguing it would boost competition among airlines and create “hundreds of thousands of jobs”.

He added that the move would prove a rebalancing for the UK economy after the country voted to leave the EU – a prospect he opposed.

Analysis by the Airports Commission estimated that the airport's expansion will create up to 180,000 jobs and provide £211bn in economic benefits and growth across the UK by 2050.

The director general of the British Chambers of Commerce, Adam Marshall. said the businesses will now want assurances from Westminster that construction can begin as soon as possible.

“Put simply, it's about time,” he said of the decision.

“This new runway must be viewed as much about connecting the regions and nations to the world as it is about capacity for London and the South East,” he added.

Heathrow Airport expansion: Now comes the hard part

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), welcomed the decision as “a welcome boost for British business.”

“We now need to see budgets committed and shovels in the ground as soon as possible,” he added.

Heathrow Airport expansion: Now comes the hard part

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), welcomed the decision as “a welcome boost for British business.”

“We now need to see budgets committed and shovels in the ground as soon as possible,” he added.

The general secretary of the TUC, Frances O'Grady, has echoed this sentiment, calling on the Government to “ensure Heathrow expansion is put in the fast lane”.

Mick Rix, national officer for transport and distribution at GMB, the union that represents airport workers, said the decision is a “win, win for everyone”.

He added that the union has supported a third runway at the airport for the best part of a decade and that expansion has a “clear-cut case”.

But no frills carrier Ryanair, which has long campaigned for more competition and choice between runways, criticised the decision to approve just a third runway at Heathrow.

“Approving a third runway at Heathrow over Gatwick is not the way forward,” said Ryanair's CEO Michael O'Leary.

“London now benefits from three competing airports and the best way to deliver additional runways in a timely and cost efficient manner is to approve three additional runways, one each at Heathrow, Gatwick and Stansted.”

International Airlines Group (IAG) CEO Willie Walsh warned: “We're pleased that a decision has finally been made but the cost of this project will make or break it.

“The Government's directive to cap customer charges at today's level is fundamental.

“Heathrow is the world's most expensive hub airport so it's critical that new capacity is affordable. The airport has consistently argued that the British economy will benefit if the third runway is approved.

“Heathrow want it, argued for it and now must ensure it's the UK and the travelling public who get the benefits from the runway, not the airport's owners.”

Steel Pension Scheme deficit falls to around 50 million pounds

(qlmbusinessnews.com via uk.reuters.com – – Mon, 24 Oct, 2016) London, UK – –

British Steel pension shortfall shrinks to around $60 million

The British Steel Pension Scheme's deficit has shrunk to around 50 million pounds ($61 million) from around 700 million pounds earlier this year, it said on Monday, adding it had been well-position to take advantage of currency movements.

The pension scheme is seen as a major obstacle to a possible joint venture deal between Tata Steel, its principal sponsoring employer, and Germany's Thyssenkrupp to manage Tata's remaining UK operations.

In an emailed statement, the British Steel Pension Scheme said an actuary estimated at a board meeting on Oct. 21 that the deficit had fallen to around 50 million pounds.

It had been “well positioned for what has been happening in bond and currency markets in recent months” and had taken the opportunity to lock in gains from equity investments.

Tata Steel, which inherited the pension scheme when it bought Corus, formerly British Steel, for $12 billion in 2007, declined to comment on the revision.

Analysts said the reduced deficit did not address all the problems and that volatility could remain even though the scheme had removed some risk.

“It demonstrates that market conditions have changed and could just as easily have deteriorated,” Martin Hunter of pensions consultants Punter Southall said.

If an employer was not able to support the scheme in future, the deficit would be higher, he added.

The government said in May that the scheme – which has roughly 125,000 members and only about 10,000 people still paying into it — had assets of 13.3 billion pounds and liabilities of around 14 billion pounds.

But sterling has shed nearly 18 percent against the dollar since Britain's June 23 vote to leave the European Union, boosting many of the blue-chip FTSE 100's international companies, which earn much of their revenues in dollars and therefore get a currency-related accounting lift.

ALSO IN BUSINESS NEWS
Since the start of the year, the FTSE 100 is up around 13 percent, although down around 7 percent in U.S. dollar terms.

The volatility and uncertainty generated by Brexit have added to the difficulties facing many pension schemes, which have been struggling to find returns in an ultra-low interest rate environment.

By Barbara Lewis

(Additional reporting by Simon Jessop; Editing by Alexander Smith)